The corona virus pandemic is devastating the economy and will likely lead to a spike in bankruptcy case filings. When we begin to emerge from widespread stay-at-home orders, many of us will be facing financial distress. Covid-19 illness related medical debts, loss of income, loss of jobs, and attendant increases in debt will require bankruptcy relief.

While no one is thrilled to file for bankruptcy protection, the bankruptcy courts are available precisely for helping the honest, but unfortunate person get a fresh start. Chapter 7 is typically a simple, straight forward bankruptcy case to get a discharge of debt and start over. Chapter 13 involves the proposal and court approval of a debt adjustment plan where you can restructure certain debts in order to save a home from foreclosure or a car from repossession.

Congress specifically had bankruptcy in mind with responding to the corona virus with passage of the CARES act. The CARES act, in part, permits current chapter 13 debtors to modify their plans to extend them up to 7 years. It also enlarges the debt threshold for small business to request treatment under subchapter V of chapter 11, which is generally more favorable to the struggling small business than regular chapter 11 provisions.

If you have suffered financially from the corona virus epidemic or simply have questions about the bankruptcy process, chapter 7, chapter 13, or consumer protection, please give us a call to discuss your options. Consultations are free and confidential.